Zeta, the full-stack, cloud-native API-ready core banking and transaction processing platform, has raised $250m in funding from its latest Series C round, and received capital from SoftBank’s Vision Fund.
It is the first time SoftBank has taken part in an investment round for Zeta, its first foray into the technology banking space and also the single largest investment in a banking technology startup globally.
The news follows on from SoftBanks's $800m investment in the now liquidated Greensill bank in 2020.
Zeta was founded in 2015 and received an evaluation in April for $1.45bn. The fintechspecialises in the issuance of credit, debit, and prepaid products that enable legacy banks to launch modern retail and corporate fintech products.
The company’s extreme growth spurt can mainly be attributed to it’s end-to-end Omni Stack software solution that enables legacy banks and modern financial institutions to launch modern retail banking and corporate fintech products.
Legacy systems in banking
According to reports, much of the software legacy banks use today was developed as far back as the 1970s — before the internet, before the cloud, before smartphones. Furthermore most financial institutions continue to use outdated banking technology that is complicated, cumbersome and provides a poor user experience.
Banking software is therefore a $300bn industry globally, and data shows that customers across the globe have increased income, improved customer engagement and reduced fraud by leveraging Zeta Tachyon, Zeta's flagship product.
Currently, Zeta services more than 10 Banks and 25 Fintechs, across eight countries, including Sodexo - a leading Issuer of Employee Benefits & Rewards with over 30 million global users, and HDFC Bank - the 14th largest bank by market cap in the world and others.
The funding will accelerate Zeta’s growth in the United States and Europe as it scales its operations, team, and platform to meet the demands of its expanding customer base.
Zeta’s financial services
Founded by London based serial entrepreneur, Bhavin Turakhia along with Ramki Gaddipati, Zeta has presence in UK, North America, LATAM, Europe and Asia.
Zeta’s Omni Stack provides the functionality that banks using archaic stacks older than the internet, need to launch to stay relevant.
Bhavin Turakhia, Zeta’s CEO, explained, “Most banks are using decades old software built at a time when Mainframes and Cobol were in vogue. They have been slow to innovate and provide poor user experiences. With Zeta, banks can leverage a modern, cloud native platform and improve speed to market, agility, cost to income ratio and user experience.”
He continued, “We are privileged to have SoftBank join us in this exciting journey as we together disrupt the stagnant landscape of banking tech,” Bhavin added.
Zeta’s Omni Stack comprises of:
- Zeta Tachyon Credit, Debit and Prepaid processing with card controls and personal finance management capabilities
- Zeta Tachyon Loans – a modern Buy-Now-Pay-Later and personal loan management platform
- Zeta Tachyon Deposits – a modern core for DDA, checking accounts, savings accounts and deposits
- and Zeta Tachyon Mobile – a ready-made, white labeled, customizable mobile app for credit cards, checking accounts, prepaid, loans, Buy-Now-Pay-Later, personal finance management and more
Munish Varma, Managing Partner, SoftBank Investment Advisers, said Banking software is a $300bn industry globally and that most banks still employ technology which is significantly older than their customers, impacting user experience and engagement. He believes Zeta’s modern Omni Stack will drive banking software upgrades catering to the digital consumer, and innovations in financial services globally.
Ramki Gaddipati, CTO & Co-founder, Zeta, added, "As the world moves to real time payments and digital financial services, the number of transactions per day between banks and customers are expected to grow exponentially. The increasingly digital world represents evolving security, privacy and data protection challenges to banks. The industry needs systems reinvented with security, privacy, scalability and reliability as the core foundations. Zeta's Omni Stack answers that need."